Three small-cap winners worth watching
Today's Financial News - Posted August 25, 2009
The overall markets are fairly strong today, but if you want the big, wealth-creating plays, you have to turn to the realm of small-caps. Here’s three winners to get your started.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore – (TFN): The markets are working on solidifying a six-day winning streak. As the Dow climbs back above the 9,500 level, inching ever closer to the psychologically vital 10,000 level, a handful of stocks are outpacing the broad markets by leaps and bounds.
Of course, for the big winners, we have to turn to the world of small caps. Is there a better place to find consistent triple-digit winners? I haven’t found it.
Earlier today, I wrote an article that mentioned a couple of the companies diligently feeding at the teat of the American taxpayer. It is only fitting that one of today’s biggest gainers is also benefiting from the forced generosity of we the people.
Wildan Group (NASDAQ:WLDN) is a tiny, $30 million company that provides outsourced services for the nation’s western states, especially California, and various private corporations. Its services range from engineering consulting to financial planning to homeland security services.
It is an excellent company to take advantage of distressed government coffers. As state governments slowly shed their expensive, unionized workforce, Wildan will see its top line expand.
Shares of the company are soaring today – up by 130% at the moment – based on the news the company has inked a $67 million contract from Consolidated Edison. Wildan will work to implement an energy-conservation program for small businesses in New York.
For a company that received just $73 million in annual revenues during all of last year, today’s contract is something worth celebrating. If Wildan can leverage the newfound cash flow, this could be the start of a very prosperous chapter in the company’s history.
Saving babies, making money
For the next big winner, we turn to the volatile world of medical equipment manufacturers.
Thanks to the FDA’s decision to approve an “expanded” label for its product that measures oxygen-saturation levels in the brain, shares of CAS Medical Equipment (NASDAQ:CASM) are up by over 74% on the day.
Previously, the company’s Fore-Sight Cerebral Oximeter product was reserved for larger, older patients. But today’s FDA decision allows doctors to use the product on infants weighing less than 2.5 kilograms.
The news opens the company up to a much larger market. But best of all, it will play a vital role in preserving the likes of newborns brought into this world a tad too early.
That is the kind of technology worth investing in.
A “cold” rumor
Finally, the rumor mill is buzzing as investors figure out what is up with Matrixx Initiatives (NASDAQ:MTXX), the maker of homeopathic cold medicines like Zicam.
Shares of the volatile company surged by more than 25% shortly after noon today with little warning or no explaining.
Most of the speculation focuses on the recent withdrawal of Zicam from the market after the FDA’s sudden announcement the supposed cold remedy could permanently disable a user’s sense of smell.
When the FDA’s decision hit the Street, shares of the company plunged nearly 75%, from close to $20 to below $5.
Today, shares of the Matrixx started the day at $5.03, but as I write, it takes $6.46 to get those same shares.
Only time will tell if the rumors of an FDA turnaround decision are true. Unless we have some clarification within the next 18 hours, however, you can be assured tomorrow’s action will not be as positive.
For options investors that can handle the risk, September-dated puts are looking very attractive.
No matter your risk tolerance, keep an eye on Matrixx. It won’t maintain current prices for long.
Next Article: TFN Reader Grapevine: There’s Something about Viral Genetics, Inc. (VRAL)
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